Maybe the term "finished size" is/ was the source of your confusion?
I think QuiltE explained it well.
I now think of " finished size" as the amount of fabric showing after it the quilt is done.
Or as QuiltE said, the unit minus seam allowances.
Example: I want to make a four patch unit that will " finish" at 4x4 square inches.
I will need to cut four pieces of fabric, each measuring 2.5 x 2.5 inches. When I just lay the pieces out. They cover a 5 x 5 inches area.
After I sew the four pieces together. This unit covers an area 4.5 x 4.5 inces.
after I sew this four patch into the top , only 4 x 4 inches of the fabrics are showing.